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Energy Trading ULG– March 2018
ENERGY TRADING
Frédérik Demaret
B2B Services
EDF Luminus
P +32 (0)2 213 48 35
M +32 (0)499 96 84 32
frederik.demaret@edfluminus.be
March 23rd 2018
ENERGY TRADING
AGENDA • Introduction of EDF Luminus • European Energy Market • Price Drivers • Portfolio Management • Remit • Specific cases Energy Trading – Frederik Demaret
EDF Luminus Subsidiary
20%
of EDF
group
>
Market
share
Vision
Energy Power
supplier & “to become the first
solutions energy partner, bringing
Shareholders provider producer
progress and comfort to
all our customers through
our 5 star service, our
innovative and sustainable
• ETHIAS solutions, the global
• PUBLILE expertise of EDF (…)”.
C
31,4% • SOCOFE
• NETHYS
68,6%
EDF Belgium
Other Shareholders
Energy production Kluizendok Antwerpen
(Evonik)
Doel
Ringvaart Beringen
Gent Oevel
Ham
(Stradus) Ham Olen/Geel
67MW
GENT Olen HASSELT
Izegem Taminco Lummen
Ieper Kortrijk
Dendermonde
17%
(Evolis)
hydro power Melle
Bilzen
installed > BRUSSEL
Lixhe
Leuze-en- Monsin
Berloz
of our production Hainaut
600
Verlaine
Femelmont
capacity from
renewable > mio
€ Villers /
Wanze
Seraing Liège
Ivoz-Rament
Angleur
Ampsin
Belgian energy Spy Andenne
sources In the next years,
Luminus will invest Floriffoux Floreffe Tihange
Grands-Malades Ciney
over €600 million in Dinant/Yvoir
renewable energy
587mioMW in Belgium
Walcourt
wind energy
Bièvre
FOSSIL OR NUCLEAR ENERGY RENEWABLE ENERGY
Thermal power stations Wind farm
Cogeneration Hydroelectric power station
10% participation in Tihange
2 & 3 and Doel 3 & 4
AGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Remit
Specific cases
Energy Trading – Frederik Demaret
Power markets: where to trade?
Energy Trading – Frederik Demaret
Gas markets: where to trade?
Energy Trading – Frederik Demaret
Capacity mix Europe
10
Energy Trading – Frederik DemaretEuropean power markets – installed capacity (2018)
Source :: https://transparency.entsoe.eu
Energy Trading – Frederik DemaretEnergy Trading – Frederik Demaret 12
Energy Trading – Frederik Demaret 13
The role of interconnections
German effects
Gas and Coal pulling Germany
to the cheap (exporter side)
Wind and sun: growing effect,
up to negative prices
Stop of German Nukes
French effects
Temperature sensitive (on
power) in southern area
Spiky merit order with cheap
base
Benelux
New CCGT’s and Coal PP in
The Netherlands
UK
UK price as f(gas,coal)
Decoupling of Prices
Only when capacities are
saturated
Energy Trading – Frederik DemaretMarket description – Type of gas
Gas network is divided in 2 types of gas networks
H-Cal : high calorific value (MWh/m³ delivered) – the orange network
L-Cal : low calorific value (MWh/m³ delivered) – the blue network
H-Cal sourcing is coming from all
around the world (LNG, North
sea, baltic countries and Russia)
L-Cal sourcing is only coming
from the Groningen gas field in
the Netherlands
Production of Groningen gas field
will decrease due to earthquakes
risks
Energy Trading – Frederik DemaretAGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Remit
Specific cases
Energy Trading – Frederik DemaretPower Price Drivers
18Drivers of natural gas prices
Source: RWEAGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Portfolio Concept & Definitions
Hedging
Short Term Market
Imbalance Market
Remit
Specific cases
Energy Trading – Frederik DemaretTRADING TERMINOLOGY
PHYSICAL/FINANCIAL POSITION
Customer Trader
L
O
N
Financial Physical
G
Net position: Physical + financial
S
H Physical Financial
O
R
T
21Optimisation versus Trading
Asset Optimiser Trader
• Manages a portfolio of assets • Creates a position
(power plants, contracts, retail • Objective is to make money
portfolio,…) from this position when market
• Objective is to control physical conditions change
and financial risks and
maximising margins = speculation
= hedging
Both actors sell and buy in the wholesale markets to
achieve their objectives, thus creating a liquid market
22TRADING TERMINOLOGY
HEDGING VERSUS SPECULATION
Hedging =
• Hedging aims at reducing the riskiness of a portfolio; match an existing
exposure with an opposite exposure
Speculation =
• taking risky positions in a market with the intention of exploiting market
price movements
23TRADING TERMINOLOGY
MARK TO MARKET
Mark to market
• Value of the position according to the current market prices.
• MtM of the portfolio assumes that the portfolio could be liquidated instantly, to
realise the value, without moving the market.
• Process of reconciling asset values or obligations with a set of market prices
Example of MTM:
buy 5 MW for March 2016 & April 2016 @ 41,9 EUR/MWh
Contract Market Contract
Volume Market value MTM MTM
value price price
(MWh) (EUR) (EUR) (EUR/MWh)
(EUR) (EUR/MWh) (EUR/MWh)
01/03/2016 3715 186.664 -155.659 31.005 50,25 -41,9 +8,35
01/04/2016 3600 147.208 -150.840 -3.632 40,89 -41,9 -1,01
24MARKET PLACES
Global vision Screen managed by
OTC market brokers (GFI, Spectron, Icap, etc.).
Intermediaries between market counterparties
Execution Clearing house ICE Endex, EPEX, Belpex, etc.
venues (Organized market place) (Own platform or via broker)
Secondary In direct line with market
market (OTC alternative) counterparties
25OTC markets and power exchanges
26OTC MARKET GV8
SPOT & FORWARD POWER MARKET
EDFL active on Belgian and French markets (Baseload and Peak products)
Spot market Day ahead (DA) and intraday (ID)
Forward market Beyond DA & ID
Bid Buyers side (price at which you are prepared to buy)
Ask (or offer) Sellers side (price at which you are prepared to sell)
Both markets traded in €/MW
27OTC MARKET GV8
SPOT & FORWARD GAS MARKET
EDFL active on Belgian, French & Dutch markets (Baseload products)
Spot & Forward market same definition as POWER
Bid & Ask (or offer) same definition as POWER
In Belgium Traded in Pence/therms (1MWh = 34,1214 therms)
In France and the Netherlands Traded in €/MWh
28TYPE OF PRODUCTS
Commodities Futures
Organized exchange, standardized contract Buy or sell a specific type of asset
at a specific time
Forward
OTC market & secondary market, not standardized For a given price
Power physically OR financially
Spot
OTC market & secondary market
Gas Financial swap
OTC market & secondary market
Products
CO2 Time and location spreads
OTC market & secondary market
Oil Spark spread
OTC market & secondary market
Coal Options (call put)
OTC market & secondary market
… Capacities booking
TSO or secondary market
TSO: Transmission System Operator
30Timeline of activities of an asset optimiser
From 3 years to 1 1 Month ahead of Day Ahead [D-1] Intraday & Balancing
month ahead of implemenation date • Create operating Market [D]
implementation date [D] schedule for the • Respond to latest
[D] • Refine the power plants unanticipated
• Forecast of the supply/demand • Balancing supply changes in the
medium-term balance to more and demand on portfolio
supply/demand accurate weather the Day-Ahead • Send re-
balance forecasts and market (DAM) nominations to
• Scheduling of availability of • Send nominations TSO
power plant power plants to TSO • Sale/purchase
maintenance • Sale/purchase operations on the
• Sale/purchase operations on the intraday and
operations on the forward markets balancing markets
forward markets
31THE SPOT MARKET REFLECTS THE PHYSICAL
BALANCE OF THE MARKET
■ The Belpex Day-Ahead Market (DAM)
provides hourly products to sell and
purchase electricity to be delivered for each
hour of the next day on the Belgian grid
■ Retailers and generators can buy and sell on
Belpex before handing in a balanced
portfolio to the grid operator Elia
32BUT SPOT PRICES CAN BE VERY VOLATILE
33FORWARD MARKETS PROVIDE A HEDGE
AGAINST SPOT VOLATILITY
■ Forward markets allow two parties to enter into a contract
for future delivery of power at a price agreed upon today
■ Forward prices are today’s expectations of future spot
prices (thus making it a derivative instrument)
■ Traded over-the-counter (OTC) or via a futures exchange
(Endex)
■ Allows retailers and generators to protect themselves from
the volatility of the spot markets by entering into hedging
contracts
34Forward and spot prices
35Forward and spot prices
36Forward and spot prices
37Forward and spot prices
380 €/MWh
20 €/MWh
30 €/MWh
50 €/MWh
60 €/MWh
70 €/MWh
10 €/MWh
40 €/MWh
01/01/2014
09/01/2014
17/01/2014
25/01/2014
02/02/2014
10/02/2014
18/02/2014
26/02/2014
06/03/2014
14/03/2014
22/03/2014
30/03/2014
07/04/2014
Belpex €/MWh
15/04/2014
23/04/2014
01/05/2014
09/05/2014
Forward and spot prices
17/05/2014
25/05/2014
02/06/2014
10/06/2014
18/06/2014
Clean Gas - €/MWh
26/06/2014
04/07/2014
12/07/2014
20/07/2014
28/07/2014
Spot prices vs fundamentals
05/08/2014
13/08/2014
39
21/08/2014
29/08/2014
Clean Coal - €/MWh
06/09/2014
14/09/2014
22/09/2014
30/09/2014
08/10/2014
16/10/2014
24/10/2014
01/11/2014
09/11/2014
17/11/2014
25/11/2014
03/12/2014
11/12/2014FORWARD AND SPOT PRICES (GAS)
YEAR AHEAD GAS PRICE EVOLUTION (FROM 2011 TILL TODAY-
Gas prices have been falling sharply
Following bearish coal
Following bearish oil (supply glut)
Less power generation demand
Less energy intensive industries
Less domestic demand
Slowing Asian growth
Fukushima crisis over
Global growing LNG capacities
Since mid 2016, slow economical regain
41Types of customers in a portfolio
B2C
High value customers with standard load profiles (SLP), strong seasonal and
temperature sensitivity (value strongly decreased)
Increased churn varies from active clients or due to “group buying”
Pricing (fix prices or market index)
B2B
FromPortfolio Management : Definition/Concept
Forward Market vs Spot Market
spot market is also known as "cash market" where the commodities are sell on
the current price or the spot rate and deliver immediately where as in case of
forward market, market dealing with commodities for future delivery at prices
agreed upon today (date of making the contract).
Hedging vs Trading
Hedging is the practice of taking a position in one market to offset and balance
against the risk adopted by assuming a position in a contrary or opposing market.
Trading is the fact to buy or sell a product on the market.
Stochastic vs Deterministic view
A deterministic model is one in which every set of variable states is uniquely
determined by parameters in the model and by sets of previous states of these
variables. Therefore, deterministic models perform the same way for a given set of
initial conditions. Conversely, in a stochastic model, randomness is present, and
variable states are not described by unique values, but rather by probability
distributions.
Energy Trading – Frederik DemaretPortfolio Management : Definition/Concept
Trader : A trader is person or entity, who buys and sells financial
instruments such as stocks, bonds, commodities and derivatives, in the capacity
of agent, hedger, arbitrageur, or speculator.
Asset Optimiser : asset managers/optimisers are responsible for
portfolios. They are supposed to ensure the financial profitability of the assets
and are not supposed to speculate.
Broker : A broker is an individual or party (brokerage firm) that arranges
transactions between a buyer and a seller, and gets a commission when the deal
is executed
Market Maker : A market maker is a company, or an individual, that
quotes both a buy and a sell price in a financial instrument or commodity, hoping
to make a profit on the bid-offer spread, or turn.
Energy Trading – Frederik DemaretPortfolio Management : Definition/Concept
Retailer : A retailer purchases goods or products in large quantities from
producers or through a wholesale, and then sells smaller quantities to the
consumer for a profit.
Producer : A producer is a company that owns and operated production
assets.
Integrated Company : an integrated company is a company that is
composed by a producing division and retail division.
Retailers are mostly making high profit in long market, Producers in short market.
An Integrated Company should realize confortable profit in all market conditions.
Energy Trading – Frederik DemaretAGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Portfolio Concept & Definitions
Hedging
Short Term Market
Imbalance Market
Remit
Specific cases
Energy Trading – Frederik DemaretWhat is a hedge?
Hedging aims at reducing the riskiness of a portfolio; match
an existing exposure with an opposite exposure
Earnings depend on fluctuating commodity prices
Hedging = act (buy/sell commodities) to reduce the variability of
earnings
Hedging does not impact expected earnings (except for
transaction costs)
Energy portfolio is complex, and hedging involves buying/selling
different commodities (including FX)
Energy Trading – Frederik DemaretWhat is the right time/price to hedge?
A hedge is a transaction on the forward market: agree now to
buy/sell in the future at agreed fixed price
Prices can be very volatile timing is crucial
Player B contracted on 18 Sep
14 for delivery in 2015 and will
pay 52,3 €/MWh
28% PRICE
DIFFERENCE FOR THE
Player A contracted on 21 Aug 13 for SAME PRODUCT
delivery in 2015 and will pay 40,6
€/MWh
Energy Trading – Frederik DemaretKey elements for hedging
Liquidity is key for hedging
Bid-Ask cost
Lot size slippage risk
Types of products forces to proxy hedges or tailor
made products (costly)
Hedge through portfolio indexes, origination
But still: Many areas of basis risk: power indexation,
time spreads, Hub/ZIG,…
Energy Trading – Frederik DemaretTRADING TERMINOLOGY
HEDGING EXAMPLE
Position Volume Market value Contract price MTM
(MWh)
LONG ASSET 1000 60 0 60 000
SHORT HEDGE -1000 MWh -60 59 -1000
PORTFOLIO 59 000
Position Volume Market value Contract price MTM
(MWh)
LONG ASSET 1000 55 0 55 000
SHORT HEDGE -1000 MWh -55 59 +4000
PORTFOLIO 59 000
Position Volume Market value Contract price MTM
(MWh)
LONG ASSET 1000 65 0 65 000
SHORT HEDGE -1000 MWh -65 59 -6000
PORTFOLIO 59 000
51DIFFERENT EXPOSURES DIFFERENT STRATEGIES
Each exposure being different, hedging strategy will be different
52FIXED EXPOSURES
• Endex click
• Endex/Belpex Mix
• Fix Price
• Floating to Fix
Directly
hedged as
exposure
arises to
lock margin
• Gas • Gas • Gas
• Power • Power? • Power?
53FLOATING EXPOSURES
• Lagging products
• Day ahead products
For lagging
Volume sill
products: Every to be fixed in
day we have to June
buy the volume Example B2C 303 Volume fixed
fixed that day during May
due to the Volumes
fixed during
differents April
laggings
54FLOATING EXPOSURES – EXEMPLE POWER
■ Floating sales are structural and arise from:
B2C : Products like Essential/Optimal
SME
■ Floating B2C formula is 1/3*(12-12-12)+1/3*(12-0-12)*1/3*(3-0-3)
Meaning price for delivery during Q1 2016 is the average of
12-12-12 : Average of closing prices of product Cal16 during year 2014
12-0-12 : Average of closing prices of product Cal16 during year 2015
3-0-3 : Average of closing prices of product Q1-2016 during Q4-2015
■ To hedge this exposure, we have to buy every day the volume that was fixed that day
Example:
In Q2-16, we have to deliver 600GWh to our variable customers
In 2014, markets will be open 250 days Every day of 2014, we have to buy 1/3*600GWh/250 = 0,80GWh of Q2-16
In 2015, markets will be open 250 days Every day of 2015, we have to buy 1/3*600GWh/250 = 0,80GWh of Q2-16
In Q1-16, markets will be open 66 days Every day of Q1-16, we have to buy 1/3*600GWh/66 = 3,03GWh of Q2-16
Vol
fixed
in Q1
Vol
fixed
in
2015
Vol
fixed
in
2014
55Types of Hedging Strategies
Hedging strategies
No hedging Static hedging Dynamic hedging
Naked strategy/ Covered strategy with Delta hedging strategy:
"Do nothing“: After perfect hedge: Trading the Dynamically rebalancing a
taking a position, no underlying asset to portfolio to make it delta-
activities with respect to completely hedge away the neutral, i.e., a change in the
hedging are pursued risk underlying asset price has no
Covered strategy with impact on overall portfolio
proxy hedge: Trading an value
asset that is highly correlated
to the underlying to hedge
away the risk as well as
possible
Stop-loss strategy: Closing
position when a given
threshold is exceeded
Source: Endesa
Energy Trading – Frederik DemaretFundamentals of Delta Hedging
Using the forward market to increase value of power plant by
taking positions varying with the delta of the option
At The Money In The Money
Value
Time & volatility
value
Option value
Intrinsic value
Strike Price
Out of The Money
Energy Trading – Frederik DemaretAGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Portfolio Concept & Definitions
Hedging
Short Term Market
Imbalance Market
Remit
Specific cases
Energy Trading – Frederik DemaretDay Ahead power price formation
Price
Hydro reservoir
Peak units
Residential
demand Commercial
demand Industrial
demand
CCGT
Exports
Coal
Nuclear
Imports Renewables
Power
Merit order principles for bid & ask curves
Algorithm to calculate match price (on full CWE region and
beyond)
Includes block (conditional) bids & offers
Settles the price at 1 pm:
If bid price > settlement price, power purchased @ settlement price
If offer price < settlement price, power sold @ settlement price
Energy Trading – Frederik DemaretHOW IS THE POWER PRICE FIXED?
€/MWh
STRATEGIC RESERVE
■ Inelastic demand DEMAND
■ Offer subject to
Supply mix
DIESEL / TURBOJETS
Fuel prices
Regulatory
■ Merit order
Market
price
OCGT@ 37%
CCGT@ 49%
CCGT@ 57%
CCGT@ 53%
■ Role of
CHP
COAL
OCGT@ 25%
Import/Export OFFER
NUCLEAR
GREEN MW
61HOW ARE POWER PRICES IMPACTED?
Offer/demand logic to 4 common examples
1. Lot of wind tomorrow!
2. Nuclear outage
3. Fuel prices are falling
4. Belgian economic growth is reviewed lower
62LOT OF WIND TOMORROW!
€/MWh
STRATEGIC RESERVE
DEMAND
■ Free wind pushes
the merit order to
the right, sending
some expensive
DIESEL / TURBOJETS
units out of the
money!
Market
NEW Market price
price
OCGT@ 37%
CCGT@ 49%
CCGT@ 57%
CCGT@ 53%
CHP
COAL
OCGT@ 25%
NUCLEAR
GREEN MW
63NUKE IS OUT AGAIN!
€/MWh
STRATEGIC RESERVE
■ Nuclear shrinks, DEMAND
marginal unit is
more expensive
DIESEL / TURBOJETS
NEW Market
price
Market
price
OCGT@ 37%
CCGT@ 49%
CCGT@ 57%
CCGT@ 53%
CHP
COAL
OCGT@ 25%
NUCLEAR
GREEN MW
64FUEL PRICES ARE DOWN
€/MWh
STRATEGIC RESERVE
■ The cost of marginal DEMAND
units is reduced
DIESEL / TURBOJETS
Market
price
NEW Market
price
OCGT@ 37%
CCGT@ 57%
CCGT@ 53%
CCGT@ 49%
OCGT@ 25%
CHP
COAL
NUKE
GREEN MW
65SLOWING ECONOMIC GROWTH
€/MWh
STRATEGIC RESERVE
■ Less demand means DEMAND
we will just use
CCGT@ 49%DIESEL / TURBOJETS
cheaper supply!
Market
price
NEW Market
price
OCGT@ 37%
CCGT@ 49%
CCGT@ 53%
CCGT@ 57%
CHP
COAL
OCGT@ 25%
NUKE
GREEN MW
66CWE (Nov 9th 2010) > NWE (Feb 4th 2014)
• Two separate Market Couplings (CWE &
Nordic) linked by a volume coupling (ITVC
organised by EMCC)
• Sequential calculation approach
• No common algorithm applied
• Full coupling with GB NWE
• One single price coupling based on a
single calculation
• One single common algorithm to allow for a
sound and robust price formation
67NWE (Feb 4th 2014) NWE/SWE (May 13th 2014)
• SWE joined on May 13th 2014
• New Name : MRC (Multi
Regional Coupling)
• Feb 24th 2015 : + Italy borders
• 4M Market (seperated market
with the same algorithm
principle) -> CZ + SL + HU +
RO
68Flow Based Market Coupling (2018)
• The flow-based model has been advocated
as the target model for highly meshed
grids (like the Central West Europe grid).
• Market coupling allocates capacity by
optimising the total economic surplus of
the different coupled spot markets’ order
books, while ensuring that the physical
limits of the grid are respected. The
consequence of this is price harmonisation
in the CWE region when sufficient capacity
is available. By using a more detailed grid
description, the flow-based method
increase this price convergence while
ensuring a same security of supply as
today.
69CWE Market Results 22nd February 2018
70CWE Market Results 26th February 2018 (Today)
71Definition (Clean) Spark-Spread/Dark-spread
The spark spread is the theoretical gross margin of a gas-fired power plant from
selling a unit of electricity, having bought the fuel required to produce this unit of
electricity.
The dark spread is the theoretical gross margin of a coal-fired power plant from
selling a unit of electricity, having bought the fuel required to produce this unit of
electricity.
In countries that are covered by the European Union Emissions Trading Scheme,
generators have to consider also the cost of carbon dioxide emission allowances.
Clean spark spread represents the net revenue a gas-fired power plant makes
from selling power, having bought gas and the required number of carbon
allowances
Clean dark spread represents the net revenue a coal-fired power plant makes
from selling power, having bought gas and the required number of carbon
allowances
Energy Trading – Frederik DemaretDefinition of Spark-Spread
Optimisation of coordinable units based on Clean Spark-Spread :
Heat
Power
Power Plant
CO2
Fuel
Energy Trading – Frederik Demaret
73Cross Border Trading Physical capacity
Total Transfer Capacity
Available Transfer Capacity
Net Transfer Capacity
Applied on fluxes
Allocation
Explicit
Implicit
Congestion Management
Harmonisation in Europe?
Scheduling
Energy Trading – Frederik DemaretAGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Portfolio Concept & Definitions
Hedging
Short Term Market
Imbalance Market
Remit
Specific cases
Energy Trading – Frederik DemaretImbalance Market
Electricity cannot be stored in large quantities. Generation must always be
equal to consumption, at any time of the day of the year. This physical
reality is called the ‘generation/consumption balance’.
Energy Trading – Frederik DemaretHow does the TSO manage to balance the country?
primary reserve
AUTOMATIC
30secBRP Responsability = individual
Energy Trading – Frederik DemaretImbalance Invoice
Imbalance Volume Imbalance Prices
(Production-Consumption)
X f(country position)
Imbalance Invoice
Energy Trading – Frederik DemaretBalancing – Main principles?
1/4h Balancing
• Balancing = difference between production and
obligation for each consumption of the whole portfolio (metering)
BRP
TSO takes care of the • Short position of BRP purchased at imbalance price -
position of the country • Long position of BRP sold at imbalance price +
Imbalance price is
• High incentive for BRP to be balanced
equal to marginal price • Many opportunities for BRP
activated by TSO
Imbalance price + and
– are equal most of • Differences (extra incentive) only if big imbalances
the time
Energy Trading – Frederik DemaretSome exemples
Sunny
afternoon
Cold evening
Power plant
outage
Windy night
81Delta between DAH prices and imbalance prices
D
D-1Delta between DAH prices and imbalance prices
D-1
DDemand side management
84AGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Remit
Specific cases
Energy Trading – Frederik DemaretMarket Regulation
Prohibition of market manipulation and trading on the basis of ‘insider
information’
Market monitoring by ACER
Transparency
Market Integrity
Public
transparency of
Post trade
Trade data fundamental data
transparency for
Market manipulation Insider dealing reporting to / inside
energy markets
prohibitions prohibitions ACER information and
through ACER
their reporting to
ACER
Applies to underlying physical power, gas and
transport contracts and markets Applies to all gas, power and transportation contracts
and markets
86AGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Remit
Specific cases
Winter 2017-2018
Sales Trading Platform & Decentralized Production
Energy Trading – Frederik DemaretWinter 2016-17
AGENDA
Introduction of EDF Luminus
European Energy Market
Price Drivers
Portfolio Management
Remit
Specific cases
Winter 2016-2017
Sales Trading Platform & Decentralized Production
Energy Trading – Frederik DemaretLE MARCHÉ DE L’ÉNERGIE HIER
CENTRALIZED
POWER
Transmission
Network
house
Distribution
Network
factory
commercial
building
90LE MARCHÉ DE L’ÉNERGIE HIER ET DEMAIN
CENTRALIZED CLEAN, LOCAL
POWER POWER
solar PV
power plant
Transmission
Network storage
storage flow
control
house power quality power
device quality
device
Distribution
local CHP storage storage
Network plant
house with
domestic CHP
factory wind
power
plant
commercial
building
91UN IMPACT
PROFOND POUR BESOIN EN
NOTRE Offre Demande ÉNERGIE NON
PORTEFEUILLE COUVERT
MANQUE DE
CAPACITÉ POUR
ÉQUILIBRER
NOTRE
PORTEFEUILLE
92LA SOLUTION? Une collaboration “gagnant-gagnant”
entre des producteurs locaux et EDF
Luminus
• EDF Luminus offre les services nécessaires au
producteur local afin de réduire au maximum sa
facture d’énergie et d’optimiser son unité de
production
• Le producteur local vend son énergie et sa
flexibilité à EDF Luminus
• Possible grâce à notre Sales Trading Platform
93The customer will
EDF LUMINUS Full integrated system via
maximize & optimize the
SALES TRADING Web application system
value of his asset position
with a 24h/7d access
PLATFORM: thanks to Flexibility option
LA SOLUTION IDÉALE The customer will be in The customer will
POUR DES the driver seat for all his automatically have the
PRODUCTEURS energy related services: correct information for
from the nomination till invoicing purposes
LOCAUX the imbalance position
Trading desk: the customer As full integrated solution,
will manage his price the dataflow will increase
position with accurate and the operational
added value information excellence position
94ELECTRICITY PRODUCTS OVERVIEW
LAGGING
Risk Averse FORMULA
Services of Clicks on
ENDEX phone OTC, OTC via
FORMULA STP or Endex quote
(manual or automated)
CUSTOMER
Services:
CHOICE
- Financial Swaps (*)
NO
(phone OTC, OTC via STP
NOMINATION
or Endex quote)
BELPEX
FORMULA
Services:
Risk Taking - Financial Swaps (*)
NOMINATION
- DAH Conditional Bids
- Intraday ReNomination
- ID Conditional Bids
95But in a changing Market context…
96We create innovative products for flexibility from
decentralised production and our customers
Providing a “window to the market” for our
customers allowing them to capture value in
the energy and flexibility markets
Sales Trading Platform:
web based tool to
communicate with our
customers
97ENERGY OPTIMIZATION ACTS ON THE
SHORTEST PERIOD
Energy Management Energy Optimization
Quarter Month Week
Year(s) Day Ahead Intraday Realtime
from Year fromYear fromYear
Click and Remote
Nomination &
Click volume declick on Activation of
Conditional Bid
volume capacity
Flexibility
98LUMINUS FLEXIBILITY PROVIDES A
COMPLETE OPTIMIZATION SOLUTION
LUMINUS FLEXIBILITY
Pricing Interactivity Program Active Load Management Program
Company Load
Market Price
Baseline Load
Company Load
Load Reduction
99PRICING INTERACTIVITY PROGRAM
PRINCIPLE
1 You manage your energy load daily, you know what’s
Pricing Interactivity Program
your capacity (to consume or to inject)
You make your nomination directly
2
into our Customer Zone the day
Market Price
before or review it intraday
Company Load
3 You manage your asset in order to
fit to your new profile
Valid for Demand Side
Valid for Supply Side
100ACTIVE LOAD MANAGEMENT PROGRAM
PRINCIPLE
1 You notice your availability to be activated in case of
Active Load Management Program need
The signal is sent to your Lumibox installed
2
Company Load on your site
Baseline Load
Load Reduction 3 The action is automated and you are directly informed
that an activation is realized.
Valid for Demand Side
Valid for Supply Side
101A REAL TIME ACTIVATION AS FOR THE
DEMAND OR SUPPLY SIDE
Valid for Demand Side
Valid for Supply Side
102FLEXIBILITY CHARACTERISTICS
8
6
1 Call up time : period needed before
activation
3
MW 2 Activation time
1 3 Minimum & Maximum duration of
activation
5 4 Direction (up/Down)
7 5 Power
t 6 Availability
4 7 Rebound effect?
2
8 Frequency of activation
103THANKS TO EDF LUMINUS OPTIMIZE YOUR
REVENUE ON EACH MARKET !
Forward Market Spot Market Intraday Market
Energy Volume
Reward €/MWh
Reactivity
Luminus Flexibility
Click & Declick Optimalisation via
Energy Management solutions
104THANK YOU
FOR YOUR
ATTENTION!
105You can also read
